Sunday, July 26, 2015


If you read much about investing, you've probably seen the recommended 60% stocks and 40% bonds touted at one point or another.  The idea being that as you age, you divert more of your portfolio in to bond funds for more secure retirement income.  It's my opinion that, if you're a dividend investor, you never really need to increase bond holdings unless it just helps you sleep better at night.  As a dividend investor, I plan on drawing dividend income only, so cashing in my holdings to support my retirement is not part of the plan.

Anyway, back to the subject at hand.  While reading annual reports from 2 of my stock funds, I was impressed with the quality of the stocks held in each fund and it occurred to me that adding a bond fund with the 2 stock funds would make a very well balanced portfolio.  It would also make it easy to invest in a 60/40 split of stocks and bonds.  You simply divide your investment cash 30% to each stock fund and 40% to the bond fund.  You wouldn't have to sell stocks and buy bonds to re-balance and maintain the 60/40 split.  With funds paying monthly dividends, all you'd have to do is divert the amount of dividend income from one investment to the other as needed.

In my case, I own stakes in AOD (stocks), SPHD (stocks) and NCZ (bonds).  So my plan is to let the rest of my portfolio increase on it's own through reinvested dividends, while I build up my stakes in each of these funds.  I'll be buying quality dividend stocks with monthly payments, increasing my monthly income from bonds and balancing out my portfolio for less volatility and maintain good growth prospects.  It really is not a big change to my overall plan, more like a minor tweak, since it fits in well with my current investment plan.

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